18 October 2023

Opening Of The Kekava Bypass, The First Large PPP Project In Latvia

In 2021, the Kekava Bypass PPP project's financial support was secured with backing from both the European Investment Bank (EIB) and the Nordic Investment Bank (NIB). On 16 July 2021...
Latvia Government, Public Sector
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After two years of design and construction, the Kekava Bypass, the first large-scale public-private partnership (PPP) in Latvia was officially opened on Friday 13 October 2023. We are proud to have advised the international consortium Kekava ABT, led by Portuguese infrastructure investor TIIC and supported by local Latvian contractors ACB and Binders. Only a few years ago, Latvian State Roads had launched this project which today hits an important milestone as the first large-scale PPP project to reach its availability phase in Latvia.

In 2021, the Kekava Bypass PPP project's financial support was secured with backing from both the European Investment Bank (EIB) and the Nordic Investment Bank (NIB). On 16 July 2021, the consortium formally solidified their commitment by signing the Public-Private Partnership (PPP) contract with the Latvian Ministry of Transport. The Ķekava Bypass, a section of the 100-kilometer-long road A7, connects Riga to Bauska and the Lithuanian border at Grenctale, serving as an integral part of the international road E67, known as Via Baltica. This project operates under a Design, Build, Finance, and Maintain (DBFM) availability model, involving a substantial 23-year contract commitment.

Besides being the first large-scale PPP in the Baltics, this project also marks the first time the EIB has engaged in public-private partnership financing in Latvia. This major project aims at improving connectivity between Baltic capitals, reducing travel times, but also improving road safety and reducing health risks for local residents of Kekava by diverting traffic through a bypass for the E67/A7 motorway. The Kekava Bypass Project offers a modern high-speed motorway that is part of the long-term road development strategy in Latvia.

Through this project, we have been able to demonstrate undisputed capabilities to advise on large and impactful PPP projects. Our integrated Energy & Infrastructure team assisted the consortium during all phases of the project, from the initial structuring and negotiation on the DBFM contract until the financial closing, as well as on all challenges posed by the impact of the Ukraine war during the construction phase. This certainly demonstrate our capabilities, as a European law firm, to extend our expertise and impact way beyond our home turf.

Our dedicated team, under the leadership of partners Valentijn De Boe and Koen Panis, along with senior associate Sarah Libregts and associate Matthias Koopmans, collaborated with our local partner Sorainen. Partners Rūdolfs Eņģelis and Lelde Laviņa played pivotal roles, supported by senior associates Inese Heinacka, Natālija Grāvele and Renāte Purvinska. The consortium's lenders were represented by Linklaters Paris in collaboration with local partner Cobalt.

The on-time delivery of this initial project within a notably brief period demonstrates the potential of the PPP model when both public and private entities share the objective of providing high-quality infrastructure for Latvia's citizens.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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